Vote set on solar plant site at Brooks

Updated 1:46 am, Saturday, January 26, 2013

The Brooks Development Authority will vote Monday on whether to give a key supplier for CPS Energy's solar power project heavily discounted access to 86 acres of land at the former Air Force base to build a solar-panel manufacturing plant.

The land deal would give Nexolon America LLC a 10-year lease on that land, which is worth $17 million, for just $5 million.

Also, the company could take ownership of the land at no extra cost at any point in that 10-year period, though it would have to pay property taxes if it exercised that option.

The land deal is part of an economic incentive package that the city of San Antonio and the BDA offered to encourage the subsidiary of South Korea-based Nexolon Co. Ltd. to locate its solar plant and headquarters at city-owned Brooks City-Base on the Southeast Side.

Dominguez defended the city's review of Nexolon Co., saying staffers had conducted a standard review of the company's books.

He outlined the incentives deal for Nexolon America for City Council on Dec. 13, when it was approved. The Express-News report ran in early January.

The council agreed to award Nexolon a 10-year tax abatement on personal property — such as manufacturing equipment — located at Brooks, $500,000 in fee waivers from the San Antonio Water System, the promise of $12 million in infrastructure improvements at Brooks and a $400,000 grant from the city's economic development fund.

The plant is expected to employ more than 400 workers.

Dominguez said, “My office has a standard sort of checklist, a due diligence process” to evaluate the health of companies seeking city incentives.

He said that process usually includes using publicly available databases such as Dun & Bradstreet and Hoover's to look at a company's finances as well as searching for news articles about the firm using Lexis-Nexis and Google.

“When we made the recommendation to council, our due diligence didn't indicate any red flags that would prevent us from engaging with the company,” he said.

In an interview with the Express-News Editorial Board, Nexolon chairman and founder Woo Jeong Lee said his company had been suffering from an industrywide downturn, triggered by a collapse in solar panel and component prices.

“The city of San Antonio really (can) appreciate the company CPS and their leadership because they put (a) really, really nice, complicated and strong contract on us (and) our consortium,” Lee said. “That means you guys are never going to lose anything.”

Nexolon's close ties with South Korean chemical conglomerate OCI Co. Ltd., Dominguez said, had given the city additional confidence in the firm.

Dominguez said his department never prepared a summary of its findings.

However, he did provide the Express-News with what he said were copies of the reports his department assembled as part of its financial review. That packet contained several pages from Nexolon's most recent semiannual report, in which they reported the nearly $60 million loss.

BDA Chairman Manuel Peláez-Prada has said his board, which is appointed by City Council, is depending on CPS and the city to vet Nexolon's financial performance.

District 10 Councilman Carlton Soules, a critic of the initial land deal, said the city should do as much research as possible on a company before offering it such hefty economic incentives.

“When we have an investment, there's a large responsibility to find out the financial viability of a company,” he said. “It's not that we're sure (Nexolon) can't (build and operate the plant), but we don't seem to know much.”